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TMI Blog2016 (12) TMI 1136X X X X Extracts X X X X X X X X Extracts X X X X ..... ually relevant for all the US based companies as well. Issue involved regarding borrowed service charges was decided by this Tribunal in favour of the assessee and further the department has resolved that the issue under MAP and consequently withdrawn the appeals filed before the Hon’ble High Court. Further, the assessee has filed a letter dated 12/02/2014 thereby stated that the issue relating to taxability of firm function charges does not arise in case of these three appeals and the only issue involved in these appeals is the taxability of borrowed service charges, which has been decided in favour of the assessee under the Mutual Agreement Procedure. In view of the above facts and circumstances, when the issues involved in these appeals have already resolved under the Mutual Agreement Procedure, we direct the AO to grant the relief accordingly to the assessee after verification of fact that the issues have already been resolved under the Mutual Agreement Procedure. - Decided in favour of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... 008 requested that borrowed services (Loan Services Income earned by the assessee) should not be taxable in India. The explanation offered by the assessee's authorized representatives was duly considered but was not found acceptable and the reason for non acceptance of the same was discussed in detail in the assessment orders of AY 2007-2008. In view of the findings given by my predecessor in AY 2007-2008 and also the fact that the draft assessment orders have been confirmed by the DRP, Mumbai; moreover, the DRP in its order for AY 2009-2010 has held that "there is no specific finding regarding taxability or non-taxability of income on the issues before us, in the MAP agreement referred to in the case. Thus, we are unable to accept the contention of the assessee that both the Competent Authorities have reached the conclusion that this income is not taxable in terms of Article of Indo-USA DTAA. In view of this observation, we find that the MAP order cannot be considered a precedent here. Therefore, the issue needs to be dealt with on merits"; the explanation offered by the authorized representative of the assessee is not accepted and the loaned service income of ₹ 4,47,75,245/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal's order for the AY 2006-07 (supra), Ld Counsel for the assessee submitted that the Ground no.1 of the said appeal relates to Article 12 of the Treaty and if the borrowed service charges constitutes FTS or not? Further, bringing our attention to para 6 of the said decision of the Tribunal (supra), Ld Counsel for the assessee demonstrated that the issue was decided in favour of the assessee and the AO was directed to grant relief after verification of the facts and finally the appeals of the assessee are allowed. Ld Counsel for the assessee also mentioned that Article 12 of both Indo-US and Indo-Singapore treaties are commonly worded therefore, the said order of the Tribunal is equally applicable to the facts of the companies registered in US as well as Singapore. Bringing our attention to the of the AO / DRP, Ld Counsel for the assessee also demonstrated that they approved the order of the AO merely by stating that the MAP is year specific and they cannot be extended to the other Assessment Years. On this issue, he submitted that the fact are alike in all the AYs / appeals under consideration, the issue is common and the conclusions will not differ and therefore, the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DTAA. Since, the language of Article 12 is common for Indo-US and Indo-Singapore DTAA, the order of the Tribunal is equally relevant for all the US based companies as well. 3. We have heard Shri Poras Kaka ld. Senior Counsel of the assessee as well as ld. DR and considered the relevant mater on record. The ld. Senior Counsel has pointed out that the issue involved in this appeal has already been considered and decided by this Tribunal in the number of decisions in the cases of group concerns of the assessee. He has referred the following decisions. * P.T.McKinsey Indonesia v/s DDIT(IT), (ITA No.7625/M/ 2010) * DDIT(IT) v/s McKinsey Incorporated & Ors.(ITA NO.2289/M/ 2009) * ADIT(IT) v/s McKinsey & Company, Inc. United States (ITA No.649/M/2007) * McKinsey & Company, Inc. Switzerland v/s ADIT(IT)(ITA No.7238/M/2002) * McKinsey & Company, Inc. (Philippines) & Ors. v/s ADIT (99TTJ 857) * DDIT(IT) v/s McKinsey & Company, Inc. United States & Others v ADIT(IT)(ITA No.3483/M/2005) * McKinsey & Company, Inc. China & Others v/s DCIT (ITA No.7239/M/2002) * ADIT(IT) v/s McKinsey & Company, Inc. Belgium (ITA No.3711/Mum/2006) 4. The ld. Counsel has further invited our atte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In view of the above facts and circumstances, when the issues involved in these appeals have already resolved under the Mutual Agreement Procedure, we direct the AO to grant the relief accordingly to the assessee after verification of fact that the issues have already been resolved under the Mutual Agreement Procedure. 7. In the result, appeals of the assessee are allowed. 7. We have extracted and inserted in the preceding paras of this order, the stand of the Competent Authority India on the such loan service charges collected by the assessee and the same were held as neither 'royalty' nor 'FIS'. If the facts are similar over the other AYs and also the other assessees of the group, the ratio of the order of the Tribunal for the AY 2007-2008 in the case of other assessees becomes relevant for adjudicating the similar issue of the ten appeals under consideration. As such, the assessee's MAP is pending in all these cases before the authorities. Further, we find that it is not the case of the AO that the facts are not similar to that of the AY 2007-2008 and others. Therefore, the argument that the MAP relevant for the other AY has no application to the facts of the present AY 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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